Executive Summary

Adjusted diluted EPS was $37.79, modestly above Wall Street consensus*, while GAAP diluted EPS was $34.47; headline net interest income fell sequentially to $1.66B and NIM compressed 6 bps to 3.26% as lower earning-asset yields more than offset declining deposit costs .
Deposits rose $4.10B (10.7% annualized) and exceeded guidance, driven by $3.10B growth in the Direct Bank and $1.35B in the General Bank; loans increased $1.14B (3.3% annualized), led by Commercial Bank and SVB Commercial .
Management lowered full-year 2025 headline net interest income guidance to $6.55–$6.95B from $6.6–$7.0B and raised deposit guidance to $163–$168B; they reiterated plans to manage CET1 (ex-SLA) to 10.5–11% by end of Q1’26 and signaled another buyback in H2’25 .
Operating backdrop: asset-sensitive balance sheet in a rate-cutting environment; stable credit (NCO ratio 0.41% at lower end of guidance), with ongoing stress in office CRE and SVB investor-dependent portfolios; narrative catalysts include deposit growth upside, buybacks, and SVB momentum as VC activity gradually improves .

What Went Well and What Went Wrong

What Went Well
- Deposit growth beat guidance: total deposits +$4.10B q/q, with strong elasticity in the Direct Bank despite lower rates; noninterest-bearing mix rose to 25.6% and cost of deposits fell 14 bps q/q to 2.32% .
- Solid loan growth: balances +$1.14B q/q, driven by Commercial Bank industry verticals (Tech, Media & Telecom; Healthcare) and Global Fund Banking in SVB Commercial .
- Capital return and liquidity: $613M buybacks (302,683 Class A shares) and liquid assets +$3.45B to $62.79B; proactive $1.25B senior/sub debt issuance to optimize capital stack .
What Went Wrong
- NII and NIM pressure: headline NII down $46M q/q; NIM down 6 bps to 3.26% as lower loan and overnight yields outweighed falling deposit costs; loan accretion declined, pressuring NIM .
- Adjusted noninterest income fell $37M q/q, driven by negative fair value changes in client derivatives and an HFS asset write-down; adjusted rental income softened on higher maintenance costs .
- Ongoing portfolio stress: elevated losses concentrated in general office CRE and investor-dependent; equipment finance improved but remains a watch area; allowance ratio eased to 1.19% as mix shifts to lower-loss GFB .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025
Net Interest Income ($USD Millions)	$1,796	$1,709	$1,663
Noninterest Income ($USD Millions)	$650	$699	$635
Net Income ($USD Millions)	$639	$700	$483
Diluted EPS (GAAP, $)	$43.42	$49.21	$34.47
Adjusted Diluted EPS (Non-GAAP, $)	$45.87	$45.10	$37.79
Net Interest Margin (NIM, %)	3.53%	3.32%	3.26%
NIM ex PAA (Non-GAAP, %)	3.33%	3.16%	3.12%
Efficiency Ratio (GAAP, %)	59.49%	63.01%	64.97%
Adjusted Efficiency Ratio (Non-GAAP, %)	54.15%	56.98%	59.62%

Segment and Balance Sheet Highlights

Item	Q4 2024	Q1 2025
Loans and Leases – Total ($USD Millions)	$140,221	$141,358
Loans – General Bank ($USD Millions, EOP)	$64,887	$64,847
Loans – Commercial Bank ($USD Millions, EOP)	$37,960	$38,693
Loans – SVB Commercial ($USD Millions, EOP)	$37,374	$37,818
Deposits – Total ($USD Millions)	$155,229	$159,325
Noninterest-Bearing Deposits ($USD Millions)	$38,633	$40,767
Cost of Deposits (%)	2.46%	2.32%
Investment Securities – Total ($USD Millions)	$44,090	$44,319
Liquid Assets ($USD Millions)	$59,339	$62,787

Key Credit and Capital KPIs

KPI	Q4 2024	Q1 2025
NCO Ratio (Quarter) (%)	0.46%	0.41%
Nonaccrual Loans / Total Loans (%)	0.84%	0.85%
ALLL / Loans (%)	1.20%	1.19%
CET1 Ratio (%)	12.99%	12.81%
Tier 1 Leverage Ratio (%)	9.90%	9.75%
Book Value / Share ($)	$1,556.16	$1,596.30
Tangible Book Value / Share ($)	$1,512.77	$1,553.06

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Loans (EOP)	Q2 2025	—	$142B–$144B	New quarterly guide
Deposits (EOP)	Q2 2025	—	$158B–$161B	New quarterly guide
Deposits (EOP)	FY 2025	$162B–$167B	$163B–$168B	Raised
Headline Net Interest Income	FY 2025	$6.6B–$7.0B	$6.55B–$6.95B	Lowered
Adjusted Noninterest Income	FY 2025	$1.95B–$2.05B	$1.95B–$2.05B	Maintained
Adjusted Noninterest Expense	FY 2025	$5.05B–$5.20B	$5.05B–$5.20B	Maintained
Net Charge-Off Ratio	Q2 2025	40–50 bps (Q1 guide)	40–50 bps	Maintained
Net Charge-Off Ratio	FY 2025	35–45 bps	35–45 bps	Maintained
Effective Tax Rate	FY 2025	25%–26%	25%–26%	Maintained
Dividend per Share	Q2 2025	$1.95 (Q4 paid)	$1.95 declared	Maintained
CET1 Target (ex-SLA)	Timeline	End of 2025	End of Q1 2026	Timeline extended
Share Repurchase Plan	2025	$3.5B plan progressing	Another plan contemplated H2’25	Added future plan signal

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3’24 & Q4’24)	Current Period (Q1’25)	Trend
Capital return & CET1	Aggressive buybacks (~$969M through Oct; plan to utilize $3.5B), CET1 ex-SLA managed to 10.5–11% by end-2025	$613M buybacks; CET1 ex-SLA 12.19% with target now end-Q1’26; another plan contemplated H2’25	Continued capital return; timeline adjusted
SVB innovation banking	TCF and deposits stable with muted VC activity; average GFB balances up; pipeline robust	TCF growth continued; SVB deposits up despite $2.4B off-balance sweep; guarded near term given tariffs/macro	Improving positioning; macro headwinds persist
Asset sensitivity & NIM	Asset-sensitive stance; NIM ex-PAA pressured by rate cuts; accretion declining	Still asset sensitive; headline NIM 3.26%, ex-PAA 3.12%; trajectory bottoms in H2’25 under 3–4 cuts	Near-term pressure; trough expected H2’25
Deposits strategy	Direct Bank used tactically; branch network growth; price competition easing	Direct Bank grew $3.1B while rates lowered; deposit betas down; cost of deposits -14 bps q/q to 2.32%	Positive momentum; cost trends favorable
Credit quality focus	Losses concentrated in office CRE and investor-dependent; allowance stable	NCO ratio down to 0.41%; stress pockets remain (office CRE, investor-dependent); allowance 1.19%	Stable overall; stress contained
Tariffs/macro	Rate-cut cycle tailwinds expected for SVB later in 2025	Elevated uncertainty from tariffs; portfolio review of exposed sectors (textiles, footwear, retail, autos)	New headwind; monitoring

Management Commentary

CEO: “Our first quarter financial results were solid... deposit growth... Credit remained stable... We maintained strong capital and liquidity positions... While we acknowledge uncertainty in the current environment, we enter it from a position of strength” .
CFO: “First quarter financial metrics were aligned with our guidance… adjusted EPS $37.79… headline NIM 3.26%… adjusted efficiency ratio 59.6%. As anticipated, headline NII was down… paced by lower yields and accretion” .
On FDIC SLA termination: “Given the low likelihood of reaching the $5B loss threshold… and operational complexity… we determined the shared-loss agreement was no longer warranted” .
Capital targets and buybacks: “CET1 (ex-SLA) 12.19%… manage toward 10.5–11% by end of Q1’26… contemplates an additional share repurchase plan in the second half of 2025” .

Q&A Highlights

Buybacks and CET1 trajectory: Management expects completion of the current repurchase and to implement another plan in H2’25 to move CET1 (ex-SLA) toward 10.5–11% by end-Q1’26 .
FDIC purchase money note: No payoff expected in 2025; potential paydown in 2026 if forward curve allows; continue asset-sensitive posture .
SVB total client funds: Growth persisted despite volatility; average balances rising; pipeline remains robust; deposit flows sensitive to VC investment activity .
Tariff exposure: Monitoring sectors like textiles/footwear/retail/autos; too early to quantify impacts; no behavior changes observed yet .
NII/NIM under rate-cut scenarios: With three cuts, headline and ex-accretion NII up low-single digits by 4Q’25 exit; trough for NIM/NII expected H2’25; more cuts could push trough later .
M&A appetite: Buybacks prioritized near term; M&A remains important long-term but no specific 2025 projections .

Estimates Context

Q1 2025 EPS (Adjusted) vs Consensus: Actual $37.79 vs $37.69* → slight beat.
Q1 2025 Revenue (Adjusted Net Revenue) vs Consensus: Actual $2.144B vs $2.217B* → miss.

Metric	Consensus*	Actual
Primary EPS (Adjusted)	$37.69*	$37.79
Revenue (Adjusted Net Revenue, $USD Billions)	$2.217*	$2.144

Values retrieved from S&P Global.*

Implications: EPS modestly beat despite NII/NIM pressure; revenue miss tied to lower adjusted noninterest income (client derivative FV, HFS write-down) and lower accretion . Near-term estimate revisions likely reflect lowered full-year NII guidance and maintained opex/NCO ranges .

Key Takeaways for Investors

Deposit growth upside and improving cost of funds support NIM stabilization as rate cuts pull through; Direct Bank elasticity and branch network strength are catalysts .
Capital return continues: buybacks ($613M in Q1), with another plan contemplated in H2’25; CET1 (ex-SLA) targeted to 10.5–11% by end-Q1’26 .
Asset sensitivity remains the core narrative; guided trough for NIM/NII in H2’25 under 3–4 cuts, with accretion declining as expected; trading setups hinge on rate path .
Credit stable at low end of guidance (NCO 0.41%); stress concentrated (office CRE, investor-dependent) but reserves and diversification provide resilience .
SVB Commercial momentum improves with rising client funds and GFB growth; sustained recovery depends on VC investment revival and macro clarity (tariffs) .
Guidance: FY deposits raised; FY headline NII lowered; opex/tax/NCO ranges maintained—expect minor consensus recalibration toward lower NII, steady expense/tax .
Near-term: focus on deposit mix shift, NIM trajectory, buyback cadence; medium-term: operational efficiency and Category 3 readiness drive ROTCE/efficiency normalization post trough .

FIRST CITIZENS BANCSHARES INC /DE/ (FCNCA)·Q1 2025 Earnings Summary